Tenancy Deposit Protection - the choices
In summary, the provisions require that any form of tenancy deposit, or money that is taken at the beginning of a tenancy on the understanding that it will be returned to the tenant at the end of the tenancy will be subject to the Government’s Tenancy Deposit Protection (TDP) scheme, whether it is called a ‘deposit’ or not.
The Act only applies where money, either cash or its associated forms, such as a cheque or a banker’s draft, is passed to the landlord or his agent from either the tenant or a third party. Third party guarantees or ‘promises to pay’ are not deposits for the purposes of the Act and therefore may continue to be used.
For tenancies where such deposits are accepted by either landlord or agent, the following provisions will apply:
- The deposit will be required to be protected within one of the statutory schemes within 30 days of receipt.
- Landlords and agents will be required to operate strictly according to the scheme rules as amended by the Localism Act 2011 and the Deregulation Act 2015.
- Tenants and others shall be furnished with prescribed information within 30 days of accepting the deposit
- The Deregulation Act 2015 has made amendments to requirements for re-protecting deposits and re-issuing prescribed information after 6th April 2007 where the tenancy has been renewed or become statutory periodic after that date. See Factsheet No. 24 for further information.
Infringement of any of these three requirements will lead to onerous penalties on the landlord. These sanctions were detailed in the previous factsheet (Factsheet No.24).
Taking Tenancy Deposits:
The introduction of these provisions for any deposits accepted for assured shorthold tenancies post April 6 2007 will lead many landlords and agents to review their policy of accepting tenancy deposits.To read more, a subscription is needed: Click here to subscribe